Short Version of Influencer Marketing & Securities

In-Class Case Study: Short Version of Influencer Marketing & Securities Question: Instigators can market investments. With the above regulations in mind, is the Canad securities regulation regime keeping pace? The Study: ● Summarized available literature regarding the topic, which concerns the effects of influencer marketing on stock prices. ● Discussed a few hypothetical enforcement actions in relation to influencers that have marketed unregistered securities. ● Created a brief fictitious poll of twenty five investors to determine the knowledge of influencer marketing among them in the finance industry. The (Hypothetical) Findings: 1. Even applied legislation may not suffice to manage hazards. 2. Social media recommendations of investment products could in some way affect the investors. ___________________________________________________________________________ Case Study Questions: Recommendation: Recommend 1-2 specific changes to the Canadian securities regulations to cover the sphere of influencer marketing. 1. Mandatory Disclosure: It is suggested that Canadian securities regulations force influencer to reveal any financial interest in publicised companies particularly when these firms are public-listed. This increases the investors’ confidence because they are able to make well informed decisions while at the same time discouraging those put on by possibly misinforming or manipulating the market through this marketing. 2. Investor Education Initiatives: The CSA should conduct and promote awareness programs on the consequences linked to the use of advice from social networks. This could include knowledge promotion, posters, collaboration with other financial schools and even providing articles. Justification: Summarize, why these changes are necessary explaining it in one paragraph based on the hypothetical findings or additional research if was conducted. According to the idea of the hypothetical study, it is found that current regulations are not specific of influencing marketing and its consequences on the investment choices. This is in complement with the fact that there is a possibility of the investors being influenced by the endorsements on social media. Compellable reporting by KOLs brings about transparency, while investor awareness enables ordinary people to make wise investment decisions. It is my belief that such measures can equally assist in reducing possibilities of ‘get-rich-quick’ schemes, or as some might describe it; the provision of securities via influencer marketing when there exists the prospect of such activities being misleading or deceptive.